The GBP/USD exchange rate could return to an uptrend on Monday, however, if the UK services PMI for October proves encouraging.

As the service sector remains the growth engine of the UK economy an uptick here could give investors fresh incentive to pile into the Pound.

However, forecasts point towards a modest easing from 53.9 to 53.3 on the month, suggesting that the sector is also coming under pressure from Brexit-based uncertainty.

Even if the headline PMI proves encouraging, though, GBP exchange rates could come under pressure from evidence that the sector outlook is deteriorating.

Friday’s raft of trade, production and growth data may prompt further volatility for the Pound.

The third quarter UK gross domestic product could provoke sharp losses for the GBP/USD exchange rate if growth is found to have eased in the last three months.

On the other hand, signs that the UK economy is holding up in the face of ongoing Brexit anxiety may help to drive fresh Pound gains.

Solid quarterly growth of 0.6% or more would increase the pressure on the Bank of England (BoE) to consider raising interest rates sooner rather than later.

Another quarter of below-trend growth, however, would leave the GBP/USD exchange rate on a softer footing.

Overall, the bias in prices is: Sideways.

The projected upper bound is: 1.32.

The projected lower bound is: 1.28.

The projected closing price is: 1.30.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 24 white candles and 26 black candles for a net of 2 black candles.

A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.

Momentum Indicators

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 85.6871. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a buy 2 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 51.79. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 55 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 59. This is not a topping or bottoming area. The last signal was a buy 2 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 0 period(s) ago.

Rex Takasugi – TD Profile

FOREX GBP= closed up 0.004 at 1.301. Volume was 94% below average (consolidating) and Bollinger Bands were 57% wider than normal.

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.

Summary

FOREX GBP= is currently 3.1% below its 200-period moving average and is in an downward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. Our volume indicators reflect volume flowing into and out of GBP= at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bearish on GBP= and have had this outlook for the last 12 periods.